Transmission sunset

Even as members continue hashing out program details, the Northwest Power Pool's Western Resource Adequacy Program has moved from design into implementation.

The focus now is on setting up the program's requirement that participants share forward-looking information about their resource and transmission capacities and other relevant data during upcoming seasons.

Simultaneously, the NWPP and WRAP participants are talking with state regulators across the West to figure out the regulators' roles, as participants hash out key questions about the program’s governing structure.

Meanwhile, NWPP staff are talking to several other utilities in the West about joining the program in the next few months (CU No. 2017 [10]).

So far, 21 entities have enrolled, representing a collective load of more than 57,000 MW, including Shell Energy, which joined Oct. 6. As many as five more could join in the next few months, including two large utilities in the Desert Southwest, NWPP's Director of Reliability Rebecca Sexton told Clearing Up.

There are also discussions about creating other ways for utilities to join the program without being full-fledged members—and without having to pay as much.

Participants share the program's costs, which are estimated to be about $10 million for the nonbinding implementation period expected to end January 2023.

Half of those costs will be split equally between participants, while the other half will be apportioned based on each entity's forecasted peak load in either winter or summer, whichever is higher.

For a large utility with a load around 10,000 MW, the cost during the nonbinding phase might be around $1 million, while a utility with a 100 MW load might still pay as much as $250,000, according to an Aug. 19 presentation by NWPP staff to the WRAP's Stakeholder Advisory Committee.

"We have heard from many smaller entities who are interested in participating in some way, but couldn't make an agreement work" due to the relatively high cost, Sexton said.

The cost structure is intentional. Splitting costs by load could result in just a handful of members paying the vast majority of the WRAP's costs. If a big load-serving entity left, that could gut the program's funding, she said.

Current members in the Northwest include IOUs (Avista, Idaho Power, NorthWestern Energy, PacifiCorp, Portland General Electric and Puget Sound Energy), the Mid-Cs (Chelan County PUD, Douglas County PUD and Grant County PUD), major consumer-owned utilities (Seattle City Light, Snohomish County PUD and Tacoma Power), BPA, Powerex, Eugene Water and Electric Board, and Clatskanie PUD.

Participants outside the region are Calpine, NV Energy, Turlock Irrigation District, Shell Energy and Black Hills Energy, which serves electric loads in Montana, Wyoming and Colorado.

Voting power in the proposed governing structure is divvied up similarly to the way it is for cost. Big decisions will be left to members, who are represented in two chambers using a House and Senate model. In one chamber, each entity gets a single vote. In the other, votes are apportioned based on load. Proposals must get 75 percent of the vote to pass.

Participants would make most big decisions, such as changing program rules and resolving compliance disputes.

The detailed design released in July proposes putting the NWPP's board of directors atop the program's governing structure (CU No. 2015 [11]). The board largely would oversee the administrative side of NWPP and WRAP. A nominating committee drawn from representatives from participating utilities, independent power producers, various nongovernmental organizations and NWPP's chief executive would choose board members.

The Southwest Power Pool has been hired to operate the program (CU No. 1966 [10]).

Participants also are figuring out how WRAP's forward-showing element will work and what data needs to be included. Ahead of summer and winter, participants need to show that they have generation capacity to meet 100 percent of forecasted peak demand and transmission capacity to get 75 percent of that load to load centers. Failing to show that would result in penalties once the binding phase begins in 2023.

The most work remains to be done on how to calculate and share data on transmission resources, Sexton said. "I think that is the most interesting piece remaining to navigate."

WRAP members have to show that they have the resources and that they can get them to where demand is. Showing that in the West's balkanized transmission ecosystem "has proved a bit challenging," she said.

It is easy for the conversations to stray from transmission to market structures.

"Some folks really want an RTO, which is something we hear in the room," Sexton said.

The program's focus is on capacity sharing, but its design leaves room for evolution into an organized market, WRAP Steering Committee member Sarah Edmonds said at the Northwest and Intermountain Power Producers Coalition annual meeting in September (CU No. 2022 [17]).

"Even though this is just an RA program, and not a market, we set [it] up in a way that it's durable and nimble," Edmonds said.

Regulators and state officials from Washington, Oregon, Utah, New Mexico, Idaho, Colorado, Nevada, California and British Columbia have discussed with WRAP members what role states should play.

The Washington UTC raised concerns with how little attention the detailed design gave to global warming. The program "must include an analysis of the potential impacts of changes in climate, which affects all three of the major inputs for determining resource adequacy, namely load forecasts, and generation and transmission facility performance," WUTC said in a Sept. 23 letter to the NWPP.

WUTC also took issue with the absence of incorporating energy constraints into the WRAP's resource adequacy analysis. The program has not set a timeline for adding it, either.

"The Commission is concerned with the lack of commitment to this key design feature," the letter states.

Several groups, including Northwest Requirements Utilities, Public Power Council and the NW Energy Coalition, have said BPA preference customers need to have a seat at the table. BPA plans to participate on behalf of its load-following customers. NRU's general counsel, Zabyn Towner, said in a Sept. 15 letter that BPA load-following customers have seats at least on WRAP's Program Review Committee and Nominating Committee.

PNGC Power sent NWPP an adverse critique of the WRAP in September.

The program largely has been developed behind closed doors, and its stakeholder engagement has been "a lecture-and-inform process," PNGC CEO Roger Gray said in the letter.

There is a danger that entities will effectively be forced to participate, especially market participants such as those represented by PNGC. It could have harm nonparticipating entities active in energy markets, the letter says.

"I want to make clear that the current direction and positions being advanced are not acceptable to PNGC, and we have concern this is not the best solution for the best interest of the region," Gray said.

Editor's note: Generation and transmission capacity requirements have been corrected.

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Contributing Editor

Dan has covered stories from Seattle to Tbilisi; spent time with the AP, Everett Daily Herald and Christian Science Monitor; and was twice a member of a team nominated for a Pulitzer Prize. He and his wife have three young children and live in Seattle.